UK consumer goods conglomerate Unilever is to focus on beauty, home and personal care after agreeing to merge its foods business with US spice and seasoning giant McCormick to create a company valued at $66 billion.
The London-based company will spin off its food division and then merge it with McCormick, which will retain its existing name and its Hunt Valley, Maryland global HQ.
The combined company will be led by the McCormick CEO and CFO, with senior management representation from Unilever Foods.
Unilever will receive $15.7 billion in cash from deal while Unilever shareholders will retain 65% stake in the merged entity, equivalent to $29.1 billion.
The deal values Unilever Foods at $44.8bn and McCormick at $21bn, valuing the combined entity at over $65bn.
Unilever said the separation of Unilever Foods will position Unilever as a leading pureplay home and personal care company, with €39 billion ($45 billion) of revenues based on fiscal year 2025 and a sector-leading growth profile.
“Post-completion, Unilever will operate across Beauty, Wellbeing, Personal Care and Home Care, with leading positions in attractive categories, fast-growing geographies and channels through a portfolio of high-performing, innovative brands,” it said in a statement.
Unilever’s beauty and personal care brands include Dove, Rexona, Vaseline and TRESemmé.
“For Unilever, this transaction is another decisive step in sharpening our portfolio and accelerating our strategy towards high-growth categories as a €39 billion pureplay HPC company with a proven sector-leading growth profile," said Unilever CEO Fernando Fernandez.
"We are unlocking trapped value through a growth-led separation of Foods, creating a scaled, global flavour powerhouse," he added.
"By combining Unilever Foods’ iconic leading brands and global reach with McCormick’s exceptional portfolio, category expertise and capabilities, we are establishing a focused, high-quality business with significant top line growth and value creation potential."
